In 2007, G&E negotiated a $3.2 billion settlement on behalf of a group of shareholders against the global manufacturing company Tyco International Ltd. The shareholders, the Teachers Retirement System of Louisiana (TRSL), had signed a contract with the firm in 2004 that would cap fees at 8.7 percent of the total recovery. But when both sides reached a settlement three years later, the court awarded G&E and other law firms involved in the case 14.5 percent, or $464 million. A Tyco shareholder and former G&E lawyer, John Gielata, is now suing G&E, claiming the firm never disclosed the agreement to the court.

In a court filing yesterday, G&E rebuffed the allegations, saying the fee is valid because TRSL asked two retired federal judges for a fee recommendation when some of the class counsel were seeking fees of up to 17.5 percent. Additionally, the firm claims it had a verbal agreement with TRSL that the 2004 contract would be void if the two sides couldn’t reach a quick settlement.

“It would be manifestly unjust, as well as lacking in any legal basis, to deprive lead plaintiff TRSL of its flexibility in this respect, or to hold G&E responsible for a result over which it had no control,” G&E lawyer Sanford I. Weisburst said in the court filing.

According to Forbes, Gielata’s suit might not have legs given the fact that the same court approved the fee in the first place and threw out a similar challenge last year.